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Music Retailers Say DRM Hurting Sales

by John Lister on November, 26 2007 at 08:11AM EST

Music and movie retailers in the United Kingdom claim digital copy protection is hurting, rather than protecting sales.

The Entertainment Retailers Association (ERA) says album sales are down 11% this year. Its director-general Kim Bayley said copy protection is "stifling growth and working against the consumer interest."

The drop in CD sales is not matched by a rise in downloads. According to the ERA, only 150 million tracks have been legally downloaded in the UK in the past three years, fewer than one track per person each year.

The ERA says consumer confusion over incompatible formats used for digital rights management (DRM), with people uncertain which files will work on which machines, is putting buyers off legal downloading. Instead, music lovers find it simpler to use file-sharing services which offer unprotected MP3 files. (Source: FT.com)

DRM systems can restrict which types of player a song plays on, or even how many computers can play the file. Similar systems also restrict the use of legally downloaded movies.

A survey earlier this year of 1,700 British music buyers found mixed reactions to DRM. 63% said the principle of copy-protecting music was fair, but 49% said it was a nuisance in practice. The survey was significant as it questioned ordinary consumers rather than only people who comment on websites and could be more likely to have technical concerns. (Source: arstechnica.com)

EMI, which made its albums available via iTunes without copy protection earlier this year, says sales have risen since the move. Initially they charged 20 cents extra for each song without DRM, but the prices are now the same with or without copy protection.

In most cases, it's record labels who are forcing online retailers to use DRM systems. A major German retailer, Musicload, says 75% of its customer service problems are caused by DRM. They say it "makes the use of music quite difficult and hinders the development of a mass-market for legal downloads." And they report that labels who have dropped DRM have seen a 40% rise in sales. (Source: heise.de)

Combating online piracy may be an impossible task, but unwieldy DRM systems appear to put off consumers from the get-go.